Energy Security, Economic and Environmental Stability

I’m excited to join the team here at Consumer Energy Report. This is an excellent website that should be a resource for everyone working in the energy industry or on energy policy. I’m especially excited to join Robert Rapier as a blogger on this page. In only 2 years here (although he’s been blogging for longer than that), he’s made a real name for himself.

I thought it would be a worthwhile exercise for my first blog post to be about how I think about energy. My views about energy come from a very different place than Robert’s – and I suspect many of you readers. By academic training, I am an economist. I graduated with an MSc. in International Economics in 2005. I didn’t even study energy economics: my focus was on trade policy and negotiating strategy in the World Trade Organization. Since then, I’ve worked in Washington on policy issues, first in the Senate as a Legislative Assistant to Senator Chuck Hagel of Nebraska, then as a think-tanker. I came to energy issues in Senator Hagel’s office, and many of my views come from my time there. Working as a Senate staffer is the best education you can get: the smartest people in the world are eager to brief you on the topic of your choice. Since Senator Hagel retired, I’ve been working on policy issues for a couple of think tanks around town, and I’m currently working as the Senior Fellow for Energy and Climate policy at the American Security Project.

Energy Security, Economic and Environmental Stability

Each aspect of my experience informs my views on Energy, Security, and Policy.

I’d originally thought about going through all my views on energy in this first post, but I think I’ll skip that for now. Future posts will focus on the pluses and minuses of different sources of energy. Plus, I’ve written that report: I’d recommend those with the time to browse through the report “America’s Energy Choices” that I wrote for ASP last year (Edit: For those having trouble downloading the report from the above link — it can also be viewed on Scribd). I will only say that every choice we – as a community, a country, or the world – make about energy, we must weigh three qualities: (1) energy security, (2) economic stability, and (3) environmental sustainability. These characteristics are sometimes contradictory, and they are not always self-explanatory, but for the sake of space on this first post, I’ll save a detailed explanation of them for future posts.

So – how will I weigh the different types of energy in my upcoming posts? By my combination of experience. My degree in economics will characterize a lot of my writing. That means that we have to look at costs and benefits of every source. It also means that I will look at cost as simply a part of a larger equation: one that includes supply, demand, labor costs, and capitol costs. When we think about high costs – we should also remember that someone is benefiting as well; when consumers are harmed, producers are helped, and vice versa.

Increasingly, the balance of trade is a very important part of energy policy. It has been that way on oil for over 50 years, but today we see that globalization is finally beginning to affect local markets for energy commodities that used to be considered non-tradable. Coal was always too heavy and too cheap to ship overseas. Natural gas is only tradable either with what used to be prohibitively expensive infrastructure investments: LNG terminals or pipelines. Now – largely because of China’s insatiable demand – trade in these goods is becoming a much more important part of the equation. I think we will soon see truly global market prices for all sorts of energy, not just oil.

The Political Realm

My time working in Congress taught me, though, that economics is never the whole equation when it comes to energy. How America chooses to power its economy is never going to be purely economic question. American consumers and businesses spend over $1 trillion of our $14 trillion economy on energy. It is inevitable that political choices are going to affect something that is such a large part of our life. That also means that the status quo has huge power: in America’s fractured political system, change is very difficult, giving entrenched interests the most power. The only way to break through these is with your own powerful coalitions.

Surprisingly to most people outside the system, it really isn’t money that moves the needle. It’s a combination of numbers, volume, narrative, and the strength of your coalition that gets something through. For example, the recently expired ethanol subsidy didn’t come about because farmers have the most money (even if they did: they’re the most frugal people I’ve met); it came about through a combination of a strong coalition among farmer and national security types. It’s easy to sell a Member of Congress on putting home-grown corn ethanol in your tank over Iranian oil.

What is a Think Tank?

Finally, in my time since leaving Senate employment, I’ve worked at two think tanks here in Washington. My family outside of the beltway still isn’t quite sure what the point of a think tank is, so many of you readers may not be either. We exist to research and write about issues that are not getting the attention they deserve in the government or the media. We are useful as commentators on current events, but we’re best when we are introducing new ideas and new solutions into the system. With that in mind, I will try to inject some ideas from outside the mainstream into this column. And – I’m open to your ideas. Please comment with your thoughts and ideas!

At these two think tanks, first the International Institute for Strategic Studies, and now the American Security Project, I have focused on how our energy use, as well as the changes in the climate (largely caused by our energy use), affects national and international security. That means how energy can cause conflict, how our dependence on one sort of energy (oil is the obvious one here) undermines our national security goals, or even how climate change can cause conflicts.

These are all big picture statements that will require a bit of unpacking. Luckily, Sam Avro and his team here at Consumer Energy Report have given me the opportunity to jump on board. Thanks to him and the rest of the team, and thanks to all of you for taking the time to read through. I look forward to working with you all.

Andrew
Welcome. I met your former boss a time or two via an associate who was in the senate for some years when Sam Nunn was SASC chairman and John Tower before him. He knows Sen. Hagel through USMC buddy Jim Webb and a couple former commandants of the Corps. Hagel (a decorated soldier himself) is by all accounts a bright,stand-up guy, so you’re likely a solid citizen, too.
It will be good to read your views particularly with a focus directed toward energy security. The tail has been wagging the dog for too long and we’d do well to pay closer attention to Central Asia, Africa and a few other spots.
All the best, Ben

Thanks, Ben – that sounds like a high-powered group of people. Webb and Hagel always worked very closely, and our staffs also managed to bridge the partisan divide.I’m going to be spending a lot of time looking at the parts of the world that aren’t always in the headlines – like Central Asia, South America, and West Africa – but that have a big effect on our energy sector. Keep an eye on this space!

AH
One of my advisors handled leg affairs for SecNav (to include Webb) before working closely with Colin Powell and some others of note. Met your boss at ASP a few times when he was with Gen. Boyd at BENS–great guy and Marine. You’re associating with some solid people.
Keep up the good work. We’ll be reading with interest.
Ben

For some reason I don’t get to download past page 5 of the “America’s Energy Choices”.
Suffice to say America’s relationship with Saudi Arabia is an embarrassment to all involved. We’ll do anything for oil, and they know it…

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Andrew Holland is a Washington-based expert on energy, climate change, and infrastructure policy. He currently serves as Senior Fellow for Energy and Climate Policy at the American Security Project, a non-partisan think tank based in Washington, DC.